Omega has secured a special amendment to defer completion of the initial work program for its Permian Deep Gas exploration play in Queensland to the end of 2023.

In addition to the amendment to work program for ATP 2037 and ATP 2038, the Queensland Department of Resources also approved the deferral of the company’s relinquishment requirements to the end of 2023.

Omega Oil & Gas’ (ASX:OMA) Permian Deep Gas play is aimed at testing a potential multi-trillion cubic feet basin-centred gas play in Queensland’s Surat Basin where previous drilling by BG Group had yielded gas flow rates ranging from 0.1 to 1 million standard cubic feet per day.

The amendment grants the company more time to drill its first two exploration wells along with a 3D seismic survey to supplement results from the wells and de-risk further appraisal drilling.

Managing director Lauren Bennett said the deferral was an important milestone for the company as it aligned its regulatory obligations with its commercial strategy.

“The Permian Deep Gas play is of significant scale and represents significant value for both Omega’s investors as well as the state of Queensland,” she added.

“The granting of the special amendment is recognition that the scope of the work program has significantly increased, and Omega’s Permian Deep Gas exploration program is the first step in unlocking this potentially immense resource.

“The alignment of our work program commitments to optimise our commercial strategy is an important step in being able to successfully de-risk the Permian Deep Gas.”

Queensland’s deferral was approved with certain conditions including the provision of a signed drilled rig agreement by 1 February 2023.

Permian Deep Gas

While BG’s five wells had all produced gas at varying rates, Omega is hoping to achieve significantly higher flow rates.

It seeks to achieve this by drilling slimmer wells and fracture stimulating the entire gas column rather than trying to isolate the best gas-bearing sand in the Kianga Formation.

Achieving higher flow rates with these changes will pave the way for the company to determine if deviating the wells or drilling horizontal sections will further improve flow rates.

The company expects to get boots on the ground by the end of February 2023 with Bennett noting that all long lead items have been ordered along with most vendor contracts sorted.

“I anticipate to be able to provide a further update on the progress of the Permian Deep Gas program in the next couple of weeks,” she concluded.

This article was developed in collaboration with Omega Oil & Gas, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.